Pension Fund Assets Now N11.56trn
The total value of pension fund assets rose to N11.56 trillion by the third quarter ended September 30, 2020.
Third quarter report of the National Pension Commission (Pencom) released at the weekend showed that about three-quarters of the total pension assets were invested in sovereign securities issued by the Federal Government of Nigeria (FGN).
In the report, Acting Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar outlined that pension funds were mainly invested in Federal Government Securities, with an allocation of about 65 per cent of the total pension assets; FGN Bonds got 57 per cent, Treasury Bills, seven per cent, Sukuk Bonds, one per cent while Agency Bonds and Green Bonds got less than one per cent.
She said the value of investments in domestic quoted ordinary shares was N585.77 billion representing five per cent of Total Assets under Management (AuM) as at September 30, 2020, indicating an increase of N61.00 billion or 11.62 per cent compared to the value of N524.77 billion as at June 30, 2020.
The increase in the value of investments in domestic quoted equities was primarily due to the appreciation of some stocks during the reporting period, as the Nigerian Stock Exchange All Share Index (NSE-ASI) rose by 9.61 per cent from 24,479.22 basis points (bps) as at June 30, 2020 to 26,831.76 bps as at September 30, 2020.
She stated that the market capitalisation was also up by 9.79 per cent, from N12.77 trillion as at 30 June 2020, to N14.01 trillion as at 30 September 2020.
She added that the value of investments in FGN Bonds increased by N329.88 billion representing 5.23 per cent; FGN Sukuk by N9.16 billion representing 9.31 per cent), while investments in Treasury Bills decreased by N239.85 billion representing 23.51 per cent; Agency Bonds by N0.45 billion representing 4.07 per cent and Green Bonds by N1.55 representing 10.62 per cent billion.
Dahir-Umar explained that the reduction in the value of the Treasury Bills was due to maturities and reallocation to other asset classes, mainly FGN Bonds and Money Market Securities.
She however said the total value of pension fund assets of N11.56 trillion comprise of N8 trillion of the Retirement Savings Account (RSA) ‘Active’ Funds like RSA Funds I, II, III and V; N934.19 billion of the RSA Retiree Fund; N1.44 trillion of the CPFAs Fund; and N1.19 trillion for the Approved Existing Schemes (AES) funds.
“Further breakdown further shows that as at the third quarter of 2020, the RSA funds (Funds I – V) had the largest portfolio, accounting for N8.76 trillion or 76.87 per cent of the total AuM.
“The Closed Pension Fund Administrators (CPFAs) and Approved Existing Scheme (AESs) assets stood at N1.44 trillion and N1.19 trillion, thus representing 12.65 per cent and 10.47 per cent, respectively of the total assets under management. RSA Fund (I) constituted 0.26 per cent (N29.59 billion) of the total AUM, RSA Fund (II) constituted 42.59 per cent (N5.02 trillion); Fund (III) 25.82 per cent (N2.94 trillion); Fund (IV) accounted for 8.19 per cent (N934.19 billion) while the RSA Fund (V) accounted for less than 1 per cent (N60 million) of the total AuM,” Dahir-Umar said.
Meanwhile, total pension contributions grew by N184.68 billion during the period under review.
Dahir-Umar said out of this total, the public sector accounted for N117.70 billion or 63.73 per cent while the private sector contributed N66.98 billion or 36.27 per cent.
“The cumulative pension contributions received from both the public and private sectors from inception to the end of the third quarter of 2020, therefore, amounted to N6.37 trillion, up from the N6.19 trillion as at the end of the second quarter, 2020, representing a growth of 2.98 per cent.
“The aggregate total pension contributions of the public sector increased by 3.76 per cent from N3.13 trillion as at the end of the second quarter 2020 to N3.25 trillion as at the end of the reporting period. The aggregate total pension contributions of the private sector on the other hand increased by 2.19 per cent from N3.06 trillion as at the end of the second quarter, 2020 to N3.13 trillion as at the end of the reporting period,” Dahir-Umar said.